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Travel Service stake sold by Icelandair

Icelandair (FI, Reykjavik Keflavik) has sold its 30% minority stake in Czech leisure carrier Travel Service Airlines (QS, Prague Ruzyne) to the other shareholders without disclosing further details. Unimex Group is Travel Service's largest shareholder. It also owns Canaria Travel, one of the largest tour operators in the Czech Republic and one of Travel Service's key customers.

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"The planned acquisition of Icelandair Group of WOW air will not go through. The Board of Directors and management of both companies have worked on this project in earnest. This conclusion is certainly disappointing," Interim President and CEO of Icelandair Group Bogi Nils Bogason said.

The group underlined in a filing to the Iceland Stock Exchange that the agreement was cancelled in mutual agreement between the two airlines.

Icelandair initially expected to finalise the takeover during a shareholders' meeting scheduled for November 30. However, the carrier later said that it was unlikely that certain unspecified criteria included in the agreement would be met by this date.

"The Board does not intend to submit to the shareholders’ meeting a proposal to postpone decision-making on the purchase agreement," Icelandair Group said.

WOW air (WW, Reykjavik Keflavik) has returned two A320-200s and two A330-300s to the lessor as a part of "necessary restructuring" given worsening financial and market conditions.

The Icelandic LCC retired its A320-200 TF-SIS (msn 4270) on November 22 and TF-BRO (msn 4305) on November 25. Both Airbus narrowbodies have since been ferried to Shannon for storage. WOW air does not operate any more A320-200s.

The carrier also returned two A330-300s TF-LUV (msn 1607) and TF-WOW (msn 1624). Both widebodies have already been ferried to Lourdes/Tarbes. WOW air has one more A330-300 in service.

All four returned aircraft are owned by Park Aerospace Holdings and managed by Avolon. Park/Avolon was also due to own and manage all four A330-900s originally scheduled to join WOW air shortly.

WOW air said in a statement that the downsizing of the fleet was done "in cooperation with its lessors" as "a part of a necessary restructuring of the airline and to ensure maximum utility of its remaining fleet".

According to Icelandic newspaper Morgunblaðið, WOW air's founder and CEO Skuli Mogensen told staff in Reykjavik that the decision to sell the airline had come about as a result of its increasingly "difficult position" that has only worsened since 2017. The situation came to a head in September when a bid to raise EUR60 million euro (USD70.6 million) through the issuance of new bonds failed with no takers thus leaving the carrier with few options.

For its part, Icelandair has also struggled this year and on the back of a weak Summer 2018 season, and was recently forced to open negotiations with bondholders regarding a temporary waiver of covenants throughout November 2018.

Against this backdrop, an ICEX disclosure on Monday, November 5 said Icelandair Group will acquire all shares in WOW Air whose owners will, in turn, gain a 5.4% stake in the group, valuing the transaction at just over ISK2 billion krona...